The elites - and I'm talking the mega rich types - are the ones that will sacrifice the upper middle class and the "kinda" rich to keep the bottom classes from rioting. The elites profited the most from this system that is collapsing, and if you follow the money, they are taking what they can, while they can. Obama recently held a press conference saying that he would not have former lobbyists working the same industry in his administraton. A week later, Geithner selects a former Goldman Sachs lobbyist as his top aide. Obama now has to make an exception to his own executive order. Who runs the country? Think again.
"The elites profited the most from this system that is collapsing, and if you follow the money, they are taking what they can, while they can." that's exactly what i see in this bailout smash and grab, grab while you can, last chance one word sums up why this isnt change: geithner
True............but I think it will now be used to buy real wealth at very low prices..............good business though.
"A "consumption tax only" would send jobs to the US in droves....and would make valuation of productive assets skyrocket.....which is exactly what banks need...." why would a consumption tax bring jobs to the US? why would productive assets skyrocket. what is your definition of productive assets ?
A *huge* advantage of changing to a consumption tax would be that people would spend less and especially less on frivolous imported goods. Normally if the US were to just raise taxes on imported goods, every other country would be screaming "unfair tarriffs" (look at Obamas proposal to use only US made steel in infrastructure projects). But a consumption tax would get around all those issues since many other countries also operate with a "VAT". Also, the trade deficits would likely dissapear/shrink making $ stronger or at least more stable.
If you want to be serious about it and make a tax effective you tax cash or cash equivalents over a certain threshold (ie over what mom and pop have put away in cds for their retirement) for both individuals and businesses. You have to disincentiveize people keeping money in nonperforming assets and incentivize cash to be put to work. Fear of risk vs taxes, tax wins every time as it is guaranteed confiscation. Taxing land is not a good idea because it will just force the sale of a lot of land and there is enough selling of assets right now as it is, we don't need any more to fuel the deflationary spiral.
Simplistic example.... Current tax posture....Country A Progressive taxes.... Both businesses and individuals pay tax according to income.... A progressive tax is a "consumption tax".... A tube of toothpaste costs $1.00 on the shelf.... However some individuals will earn a $1.00 and pay a $1.00....some individuals will have to earn $1.30, pay $1.00 at the store, and 30 cents to the government....A corporation faces basically the same prices.... .............................................................................................. Country B only taxes products consumed...at a rate of 10%.... All individuals and businesses now pay $1.10 for a toothpaste.... There are no other taxes.... .............................................................................................. Country A fell into economic depression.... Before the depression....revenues were an average $100 per person....20% of the people became unemployed....but the government wanted to have the same revenue as before....Thus the government raised taxes on the 80%....The increases in prices made products more expensive and fewer products were sold creating even more unemployment....but the government wanted to remain the same size as before....and therefore raised taxes on even fewer workers.... Finally one day...there was no employment and no products for sale period....Thus "a failed state ".... .............................................................................................. Country B changed its tax policies to a 10% consumption tax only....Many of the best companies domiciled their companies in this country because of the no income tax provisions....Because of lower prices....they hired more workers because more products were being sold.... The assets at work in Country B were of the same makeup as in Country A....but because of the government's tax position their stocks skyrocketed as compared to the same type company in Country A....because their business was booming, while Country A's business was evaporating into thin air.... ................................................................................................ The US at the moment is Country A.... And at the stroke of a pen....could be Country B.... .......................................................................................... But for some bizarre reason....the most highly educated economists under government employ....and in particular the politicos....do not grasp this concept.... Furthermore.....the latest $4 Trillion estimate by GS....still comes nowhere close to replacing over $30 Trillion....and is a failed concept....based on a failed model....and equal distribution does not exist ....